Late last month, NSW Treasurer Mike Baird and Roads and Ports Minister Duncan Gay announced the appointment of Nicholas Whitlam as Chairman of Sydney Ports Corporation. This was in addition to his current role as Chairman of Port Kembla Port Corporation.
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In 2005, a NSW Legislative Council Committee released a report into Port Infrastructure in NSW with recommendations including that the NSW Government consider completion of the Maldon to Dombarton line.
This report also cited a study that stated ‘‘that a container terminal at Port Kembla could potentially contribute $400 million to the regional economy’’.
In today’s terms this is about $500 million. However, if Port Kembla and Port Botany are leased to the same private sector company, there would be a reduced incentive to develop Port Kembla as a container port.
As a worst case scenario, Wollongong could be stuck with:
1. Port Kembla is leased with Port Botany.
2. The new owners, whether foreign or domestic, put all containers through Port Botany and there are no container facilities at Port Kembla.
3. The completion of the Maldon Dombarton rail link is put off again.
4. Port Kembla continues just for car imports plus coal and wheat exports and other bulk commodities.
5. Mt Ousley and the existing Sydney-Wollongong rail line is increasingly congested, thus limiting further growth of Port Kembla.
6. Commuting from Wollongong becomes harder.
7. The new port owners increase port fees for Bluescope Steel, and put more pressure on the local steelworks.
8. Wollongong becomes a less attractive place to live.
9. Property values decline.
10. Rate revenue declines.
Wollongong has an interest in getting a much better deal than is on the table at present. This could include:
1. Port Kembla remains in public hands, or is leased, with conditions, separately from Port Botany.
2. The Maldon Dombarton rail link is completed and Port Kembla gets a container terminal, both tying in with construction of a new intermodal terminal at Moorebank.
3. Port Kembla actively competes with Port Botany on service and price levels and over time Port Kembla becomes a container port of choice.
4. Completion of the Maldon Dombarton link allows for more freight on rail along with more and faster passenger trains on the existing Wollongong-Sydney line.
5. Wollongong becomes a more attractive place to live and work.
6. Rate revenues increase.
Such a scenario works very well in New Zealand where Auckland is served by its own port and the Port of Tauranga, which is linked by a rail network complete with an eight-kilometre tunnel to an intermodal terminal in South Auckland.
The two ports are separately owned and compete with each other to give better service to shipping lines, exporters and importers.
The Port of Tauranga, part owned by a regional council and a listed company, has gone from strength to strength. Many shipping lines go to Tauranga rather than Auckland and this year, the Port of Tauranga was short-listed to be the international port of the year.
The approach adopted by the Victorian Government for Hastings to be the preferred site for a supplementary container port for Victoria once capacity at the Port of Melbourne is reached is of note.
This is being done under via a Port of Hastings Development Authority which is a new state-owned corporation established through the Transport Legislation Amendment (Port of Hastings Development Authority) Bill 2011.
The aim is to facilitate development of the Port of Hastings to increase capacity and competition in the container ports sector servicing Melbourne and Victoria.
A similar approach should be adopted by the NSW Government. If the two ports are leased to the same new owner, the promised contribution of $100 million to regional infrastructure should be increased to value of a container port at Port Kembla; that is $500 million.
Associate Professor Philip Laird is with the Faculty of Informatics at the University of Wollongong. He is a well-known commentator on land transport issues.
